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The government of Uzbekistan has moved to expand its crypto regulations through a decree signed by President Shavkat Mirziyoyev. The document provides definitions for terms like crypto assets, exchange, and mining, and determines the main regulatory body for the industry.
Agency Under President Mirziyoyev to Oversee Crypto Market in Uzbekistan
Uzbekistan’s head of state, Shavkat Mirziyoyev, has signed a new decree expanding the regulatory framework for the Central Asian nation’s crypto space. Its stated goal is to further develop digital technologies, create favorable conditions for entrepreneurship and improve the legislation in this sphere.
The National Agency for Project Management under the president has been transformed into National Agency for Perspective Projects, Forklog reported, quoting the document. The NAPP will become the country’s main crypto watchdog.
The regulatory body has been tasked to implement the state policy in the crypto economy and ensure investors’ rights are protected. It will also take charge of introducing blockchain technologies to the public sector and combatting money laundering, terrorist financing and weapons proliferation through cryptocurrencies.
The decree defines crypto assets as property rights representing a collection of digital records in a distributed ledger that have value and owner. Starting from Jan. 1, 2023, Uzbekistan’s citizens and companies will be allowed to buy, sell and exchange cryptocurrencies through crypto service providers.
The President’s order lists a number of entities that fall under this category, including digital asset exchanges, mining pools, crypto depositories, and crypto stores. They will be required to register as local businesses and obtain licenses or mining certificates from the government agency.
Uzbekistan legalized crypto trading in 2018 but in late 2019 the government banned local residents from purchasing cryptocurrencies. They could only sell. In November, 2021, citizens were allowed to trade crypto assets for national currency on licensed domestic crypto exchanges while non-residents were permitted to exchange digital coins for foreign fiat.
Decree Bans Unauthorized Mining, Minting of ‘Anonymous’ Cryptos
Only registered firms will be able to mine cryptocurrency in Uzbekistan. Mining farms will pay a higher electricity tariff during peak hours of consumption. Unauthorized mining will be prohibited. The ban applies to the minting of what the decree calls “anonymous cryptocurrencies” as well and any transactions with them.
Just as before, Uzbekistanis will not be permitted to use or accept cryptocurrencies as a means of payment for goods and services within the country. On the positive side though, crypto-related transactions of individuals and companies will not be subject to taxation, according to the document dated April 27, 2022.
Tax breaks will also be provided to participants in a new regulatory sandbox that the NAPP will establish to pilot crypto projects. The entities involved in the trials will also be exempt from other obligations to the state budget, including customs payments other than the duties for imported hardware and software.
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What are your thoughts on Uzbekistan’s new crypto regulations? Let us know in the comments section below.
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
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